OPEC to de­bate oil out­put cut next week

OPEC will de­bate an oil out­put cut of 4.0-4.5 per­cent for all of its mem­bers ex­cept Libya and Nige­ria next week but the deal’s suc­cess hinges on an agree­ment from Iraq and Iran, which are far from cer­tain to give full back­ing.

Three OPEC sources told Reuters a gath­er­ing of ex­perts from the oil pro­ducer group in Vi­enna had de­cided on Tues­day to rec­om­mend that a min­is­te­rial meet­ing on Nov 30 de­bate a pro­posal from mem­ber Al­ge­ria to re­duce out­put by that amount. Such a cut would bring OPEC’s cur­rent out­put down by more than 1.2 mil­lion bar­rels per day (bpd), ac­cord­ing to Reuters cal­cu­la­tions based on the group’s Oc­to­ber pro­duc­tion, and is to­wards the up­per end of mar­ket ex­pec­ta­tions.

But sources also said the rep­re­sen­ta­tives of Iran, Iraq and In­done­sia had ex­pressed reser­va­tions about their level of par­tic­i­pa­tion in what would be the group’s first sup­ply-lim­it­ing deal since 2008. Brent oil fu­tures traded flat at $49 per bar­rel, par­ing ear­lier gains of around $1 a bar­rel. As of 1500 GMT, the meet­ing had yet to end. In Septem­ber, the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries agreed to re­duce pro­duc­tion to be­tween 32.5 mil­lion and 33.0 mil­lion bpd - an ef­fort to prop up prices - from its lat­est pro­duc­tion es­ti­mates of 33.8 mil­lion bpd.